When a Short Sale in Elk Grove Takes a Year to Close
People love to hear my tales about true stories that happen in Sacramento real estate, especially when it comes to long-suffering short sales in Elk Grove. Why Elk Grove? Because so many of the neighborhoods in Elk Grove were built during 2004 to 2008 or refinanced during the boom, which means Elk Grove has had its fair share of short sales. Also, many of the loan modifications promised to homeowners turned out to be jokes.
Lots of short sales close within 3 months, but every so often I get that oddball short sale that turns out to be a huge challenge.
Many oddball short sales are problematic due to condition because buyers just don’t want to do any work. They want a turnkey home in a nice neighborhood, and they don’t care if they buy the home for a little bit less if it needs work. They prefer to buy a home that requires zero work even if it means paying a little more.
I have sold this pool home in Elk Grove 5 different times. I listed this in October of last year. I was beginning to wonder if this was maybe a flashback to the early short sales of 2006. It was a boomerang, every time we’d go into escrow, BAM, it would fall back out again. It didn’t help that there were 3 loans, all with HUD. Yup, it was an FHA short sale through Bank of America, one of the worst types of short sales among the hundreds I’ve closed. We worked our way through it and got the Approval to Participate and received an approved price of $350,000.
Things were looking up, and we were very close to receiving the short sale approval letter when all of a sudden, BAM, Bank of America dumped the servicing and the loans for this Elk Grove short sale were sold by HUD to an institutional lender, BSI, which seems to specialize in buying underwater mortgages held by FHA and others.
The negotiator at BSI told us they were sending out an agent to do a BPO and obtain an estimate for the repairs. Instead, they sent a representative of an investment group that planned to buy the property from the bank after foreclosure. How do we know this? The guy told the seller who he was. Grinned and carried on about how they buy foreclosures directly from the bank, bypassing the trustee sale. The seller should have kicked him out of the house, but he didn’t.
We were a week or so away from foreclosure. The bank suddenly decided it wanted an additional $40,000. This was about the time somebody in the neighborhood stole my sign post and dragged the panel to the high school. Then some agent in Elk Grove — probably a doofus with too much time on his hands and not enough business — reported my listing to MetroList and accused me of relisting the home without written permission, which of course I had. I don’t understand the problem with some agents.
Now, other listing agents might have given up at this point. Just washed their hands of the whole mess. Not this Elk Grove Realtor. I promised my seller we would close. First, I told the negotiator at the bank that I knew all about the scheme to sell the home privately to an investment group and to intentionally thwart the seller’s chances of a short sale. There are laws against this kind of behavior. And I let him know that I had advised the seller to obtain legal advice.
A lawyer? BAM, the foreclosure sale was postponed. We ultimately found another buyer who was willing to pay the higher price and do the repairs required by the buyer’s lender in advance of closing. Those kinds of buyers, btw, are few and far between these days. By the hair of our collective chinny, chin, chin, we closed escrow today, a day early even.